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ECB's Knot: falling interest rates should ease debt burdens

BY Reuters | ECONOMIC | 10/22/24 09:37 AM EDT

NEW YORK, Oct 22 (Reuters) - Falling interest rates should ease the pressures created by high government borrowing levels, Dutch European Central Bank governing council member Klaas Knot said Tuesday.

"Interest rates are coming down again so that should make debt serve burdens a little more sustainable," Knot said at an event held by Bloomberg in New York. He also said the financial system had navigated well the surge in rates launched by top central banks to tackle high inflation pressures. (Reporting by Michael S. Derby)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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